NEW YORK (Reuters) - A week packed with U.S. economic data is likely to provide investors with more evidence of the extent to which the coronavirus pandemic has hit growth, sharpening the debate on whether a rebound in stocks has been justified amid an unprecedented slowdown.
The raft of data will include reports on retail sales, industrial production and inflation from April, a month in which large parts of the country were under lockdown as officials mandated stay-at-home policies due to the spreading coronavirus.
It comes as investors digest a rally that has lifted the S&P 500 Index .SPX more than 30% from its March lows, even as unemployment has soared and large swathes of the U.S. economy are at a near-standstill.
Economic data worse than the already-dire expectations could bolster the case for investors who argue that the rally in stocks has gone too far. Few can say, though, whether it will derail a surge in which stocks logged their best monthly gain in three decades in April despite weak economic data from the previous month.
“The market has shown an ability to look through the economic data. I think it will continue to do that for the April data,” said Doug Cohen, managing director for portfolio management at Athena Capital Advisors.
The parade of April data kicked off on Friday, when the Labor Department reported the U.S. economy lost a staggering 20.5 million jobs that month, the steepest plunge in payrolls since the Great Depression. Though bleak, that number was smaller than analysts’ expectations of 22 million jobs lost.
